Question

USE THE FOLLOWING DATA TO ANSWER THE QUESTION John and Anne have the following expenses and...

USE THE FOLLOWING DATA TO ANSWER THE QUESTION

John and Anne have the following expenses and account balances:

John’s annual 401(k) contribution

$22,000

John’s annual salary

$165,000

Current Liabilities

$36,000

Housing Costs (PITI) monthly

$3,450

Cash & Cash Equivalents

$60,000

Monthly non-discretionary cash flows

$7,500

Monthly debt payments other than housing

$1,000

* John’s employer matches $1 for $1 up to 5% of his salary in his 401(k) plan.

Based on the information above, calculate the Housing Ratio 2.

32.36%

30.20%

28.36%

34.75%

Homework Answers

Answer #1

Answer is 80% and working as follow

1 Jhons Annual Salary          1,65,000.00
Jhons House Hold Expenses Annual
Housing Costs (PITI) monthly                              41,400.00
Monthly non-discretionary cash flows                              90,000.00
2 Total Housing Cost          1,31,400.00
Housing Ratio = 2/1*100 80%
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